Strike negotiations founder over wages at British Steel

Europe's biggest blast furnace, at Redcar, England, is cold. The fires at the British Steel Corporation (BSC) plant are burning instead in barrels at the gates -- warming the pickets in what some union leaders think may become Britain's most serious strike in 50 years.

Talks between the traditionally moderate steel unions and the nationalized BSC foundered Jan. 7 in a morass of ill will and distrust. Steelmen now have been joined by truckers and dockworkers in nationwide action, shutting down not only BSC (suppliers of 55 percent of the nation's steel) but also private companies (supplying 25 percent) and importers (supplying 20 percent).

The strike will force BSC to mend its ways or the government to abandon its nonintervention policy.

Nominally, the issue is wages. Late last year BSC offered a 2 percent increase -- a fraction of the amount earlier won by miners from the National Coal Board, and bound to anger steelmen.

Negotiations since have pushed the offer to 12 percent -- still not enough, say the unions, with inflation topping 17 percent here.

The real issue, however, appears to be the old bugbear of British industry: low productivity. It is a problem that many feel has been left untended for so long that simple solutions are unlikely.

Figures cited by BSC show British steelworkers lagging behind their international competitors in output per man. According to a report by the National Economic Development Council, Britons needed 10.9 manhours to produce a ton of steel in 1978, while Italians needed 5.2, West Germans 5.9, and French 6. 4.

For these and other reasons, BSC estimates that it loses L1 million ($2.2 million) each day. Some of the loss can be laid at the union doorstep.

As in many other older industries here, there is no single industrial union. Instead, each plant is crisscrossed with competing craft unions, enforcing separations between (for example) those who produce the steel and those who maintain the plant. The more efficient European workers are willing to do a variety of different jobs, thereby cutting down on the numbers needed.

But mismanagement also appears to be a factor. Even among middle management at BSC there is little affection for the top executives, who are not credited with much market foresight or sensitivity to personnel.

In a quick reversal of their boom-time thinking several years ago (when they poured more than L1 billion [$2.2 billion] into new facilities such as the Redcar blast furnace), BSC management now wants to trim steelmaking capacity from 21.5 million tons per year to 15 million tons per year -- less than one-seventh of Japan's current output. Their plan, to which the unions basically agreed before the strike, is to lop off 52,000 jobs, leaving a work force of about 100,000.

But the problems are not all of BSC's making. Since 1973 there have been steep declines in British automaking, industrial steelwork manufacturing, and shipbuilding. Some of the falloff is due to worldwide economic decline, but much is also due to increasing import penetration from countries where government subsidies are higher or workers are content to earn less.

Given the temper of the times here, however -- so-called flying pickets blocking work at plants not their own and no mediator in sight to kick the stalled talks into gear -- there appears little hope that major underlying problems will be redressed. The danger is that with a little more money and a few less jobs, a patchwork agreement may paper over the fissures in the industry's facade.